During the recent Black Friday period, Nedbank observed a significant shift in trends in consumer spending behaviour.
This points to the the continual evolution of South Africa’s retail landscape, and a greater awareness by South Africans of the importance of sound personal financial principles.
Decline in Card Transaction Volumes
According to data reported by BankservAfrica, the South African banking industry experienced a 6% decline in Black Friday card transaction volumes.
Yusuf Hassen, Head of Product Management Card at BankservAfrica, expressed that while this decline may initially seem concerning, it is essential to understand the broader context influencing consumer behaviour.
He says, “Financial constraints faced by consumers were clearly visible in this year’s Black Friday spending patterns, Hassen notes,
“and we are also mindful that promotions extended throughout the month of November, which could have resulted in the muted figures for Black Friday itself.”
Possible Reasons for Transaction Data
According to Hassen, Black Friday spending could have been impacted by the fact that it fell on the 24th of November, as opposed to the 25th that is the usual South African pay day.
Executive Trading Product VP at Nedbank explained that Black Friday delivered mixed data in terms of transaction volumes and values.
Despite a decrease in physical card transactions, there was a continuation of the shift towards e-commerce, evidenced by a robust 35% growth in online payment transactions.
Nedbank’s own data also reveals a pattern that appears to bear out Hassen’s opinion about the payday mis-timing of Black Friday. The bank saw a slight decline in the growth of volume and value of transactions on the day itself, followed by a significant recovery over the weekend.
Sharp Rise in Contactless Payments
Nedbank’s issuing base mirrored this trend, remaining flat year-on-year but showing a strong weekend recovery into Cyber Monday. Notably, e-commerce transactions involving Nedbank and American Express cards increased on Black Friday.
“The trend towards contactless payments is particularly encouraging, demonstrating a 47% volume increase and a staggering 93% value growth compared to 2021,” says Naidoo, highlighting the fact that this was not a passing fad relating to the pandemic, but rather that consumers now recognise the convenience and security that these contactless transactions offer.”
Data shows shift towards mindful spending
The highest number of transactions by a single Nedbank cardholder on Black Friday dropped significantly, coming in at 64 in 2023, compared to 100 in 2022.
It was further observed that this datapoint is indicative of a broader trend observed by Nedbank towards more discerning and mindful spending by consumers.